AmEx Mines Facebook ‘Likes’ to Connect Merchants, Customers

American Express Co. chairman and chief executive officer Kenneth I. Chenault. AmEx, led by Kenneth I. Chenault, 60, has ramped up its use of social networking and hired executives with backgrounds in technology as the firm girds to compete for online and mobile payments with rivals including Visa Inc. and EBay Inc.s PayPal. Photographer: Jin Lee/Bloomberg

July 19 (Bloomberg) -- American Express Co., the biggest
credit-card issuer by purchases, said it will deliver customized
discounts and offers to cardholders who allow it to mine their
Facebook relationships, online interests and “likes.”

“We’re running algorithms to serve you up offers that are
relevant based on your likes, your preferences and your
friends,” Edward Gilligan, vice chairman of New York-based
AmEx, said in an interview yesterday.

Through the new “Link, Like, Love” application on the
American Express Facebook page, customers can link card accounts
to their own pages. Cardholders’ Facebook use and circle of
online friends -- what Palo Alto, California-based Facebook Inc.
calls a user’s “social graph” -- will be used to personalize
merchant deals, entertainment offers and other perks.

AmEx, led by Chairman and Chief Executive Officer Kenneth
I. Chenault, 60, has ramped up its use of social networking and
hired executives with backgrounds in technology as the firm
girds to compete for online and mobile payments with rivals
including Visa Inc. and EBay Inc.’s PayPal. Last year, the firm
hired Daniel Schulman, a former Sprint Nextel Corp. executive,
to run the enterprise growth group.

The addition of AmEx deals to Facebook may help the social
network capitalize on the fast-growing market for daily online
coupons made popular by sites such as Groupon Inc. and
LivingSocial. In November, Facebook unveiled a feature that lets
merchants including Gap Inc. and McDonald’s Corp. offer
discounts to customers, and this year rival Google Inc. began
offering a similar product called Google Offers.

Codes, Coupons

Unlike other discount shopping programs, customers won’t
have to use a code or paper coupon to reap the benefits,
Gilligan said. All discounts for online and in-store shopping
will be applied at the end of the billing cycle as a credit in
the cardholder’s statement, he said.

“You don’t have to pre-buy anything, you don’t have to
print out a coupon, you don’t have to show your smartphone to a
sales clerk to get the value of the offer,” Gilligan said.

American Express isn’t charging merchants for the service
or repackaging personal information for sale to third parties,
he said. The program allows the lender and retailers to track
the progress of certain marketing campaigns.

Store owners will be able to track how many new customers
and how much in sales were generated through specific
advertising campaigns, Luke Gebb, AmEx’s vice president of
global network capabilities, said in an interview.

“You’re able to also look back at that campaign and tell
whether you gained loyal customers, did you receive repeat
business off of those customers,” Gebb said. Retailers will
“have a scientific means of understanding what worked and what
didn’t so that you can try something different in the next
campaign.”

American Express rose 88 cents, or 1.7 percent, to $52.21
at 9:51 a.m. in New York Stock Exchange composite trading. The
shares had gained 20 percent this year through yesterday.